Answer:
Ans. This company rate of return is 57.07% annual
Step-by-step explanation:
Hi, well, we need to set the following equation with the data of our problem. The equation as follows.
[tex]FutureValue=\frac{A((1+r)^{n} -1}{r}[/tex]
Where:
A= $30,000
n= 5
r= the rate that we are looking for
Everything should look like this
[tex]450,000=\frac{30,000((1+r)^{5} -1)}{r}[/tex]
Now, you can see how hard it is to solve this equation for "r", therefore we go to MS excel so we can use the function "Seek Goal". Please see the attached excel spread sheet.
The instructions to the "seek goal" function are as follows.
Set Cell: C5
To Value: 450000
By changing cell: C4
The result is in yellow.
Ans. 57.07% annual
Best of luck.
